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Scott Morrison tried to brush aside questions about Australia’s worsening housing unaffordability situation by claiming buying your first home has long been difficult – including for him. 

The Prime Minister said he remembered it was tough to raise a deposit when he and his wife Jenny were hunting for their first house in Bronte, an upmarket suburb in Sydney‘s east, during the 1990s.

‘The hardest thing to do when you’re buying your first home – and I remember this when Jenny and I were buying our first home and it was hard back then, I believe it’s harder now – was the deposit you needed to pull together, and that was a 20 per cent deposit,’ he said.

However, runaway house prices and stalled wages mean any struggles Mr Morrison had pale in comparison to those faced by the younger generation today.

Prime Minister Scott Morrison and his wife Jenny in November 1995 bought their first home under their own names, this California bungalow on Lugar Brae Avenue, a stone's throw from his parents' house on Evans Street where he grew up

Prime Minister Scott Morrison and his wife Jenny in November 1995 bought their first home under their own names, this California bungalow on Lugar Brae Avenue, a stone's throw from his parents' house on Evans Street where he grew up

Prime Minister Scott Morrison and his wife Jenny in November 1995 bought their first home under their own names, this California bungalow on Lugar Brae Avenue, a stone’s throw from his parents’ house on Evans Street where he grew up

The two-bedroom duplex set them back $330,000, which when adjusted for inflation is about $635,000 - a far cry from what a starter home in the sought-after suburb would cost today

The two-bedroom duplex set them back $330,000, which when adjusted for inflation is about $635,000 - a far cry from what a starter home in the sought-after suburb would cost today

The two-bedroom duplex set them back $330,000, which when adjusted for inflation is about $635,000 – a far cry from what a starter home in the sought-after suburb would cost today

Scott and Jenny Morrison, who married in 1990, got their first home, an apartment in a 1960s-era block on Pacific Street, in 1995 bought through a company trust, having rented since he moved out of home aged 24

Scott and Jenny Morrison, who married in 1990, got their first home, an apartment in a 1960s-era block on Pacific Street, in 1995 bought through a company trust, having rented since he moved out of home aged 24

Scott and Jenny Morrison, who married in 1990, got their first home, an apartment in a 1960s-era block on Pacific Street, in 1995 bought through a company trust, having rented since he moved out of home aged 24

Mr Morrison initially rented after he moved out of home aged 24. He and Jenny married in 1990 and purchased their first unit – an apartment in a 1960s-era block on Pacific Street – in 1995 via a company trust. 

A few months later in November 1995 the couple bought their first house under their own names, a California bungalow on Bronte’s Lugar Brae Avenue, a stone’s throw from the home where Mr Morrison grew up. 

The two-bedroom duplex set the couple back $330,000, which when adjusted for inflation is about $635,000 – a far cry from what a starter house in the sought-after suburb would cost today. 

Mr Morrison then went on to secure a high-paying job working in tourism, first in New Zealand, and later as the managing director for Tourism Australia.

In 2006 the Morrisons rented their first house out for $660 a week while living elsewhere. Mr Morrison was elected at the MP for the seat of Cook, which covers the Sutherland Shire 25km away, on November 24, 2007.

By the time they sold their first home in June 2009 the price had ballooned to $985,000 – or about $1.32 million when adjusted to today’s dollars.

‘We held on to the apartment for as long as we could… we negatively geared it to get leverage into the place we bought,’ Mr Morrison later said. 

In 2006 the Morrisons rented it out for $660 a week while living elsewhere, Mr Morrison having been elected to the seat of Cook

In 2006 the Morrisons rented it out for $660 a week while living elsewhere, Mr Morrison having been elected to the seat of Cook

In 2006 the Morrisons rented it out for $660 a week while living elsewhere, Mr Morrison having been elected to the seat of Cook

By the time they sold it in June 2009 the price had ballooned to $985,000 - about $1.32 million in today's dollars

By the time they sold it in June 2009 the price had ballooned to $985,000 - about $1.32 million in today's dollars

By the time they sold it in June 2009 the price had ballooned to $985,000 – about $1.32 million in today’s dollars

Ms Morrison also bought a holiday home in Blackheath, in the Blue Mountains, for 2003 for $325,000

Ms Morrison also bought a holiday home in Blackheath, in the Blue Mountains, for 2003 for $325,000

Ms Morrison also bought a holiday home in Blackheath, in the Blue Mountains, for 2003 for $325,000

The offloaded it in 2009 for $347,000 - a loss of about $37,000 after inflation, calling it their worst financial mistake ever

The offloaded it in 2009 for $347,000 - a loss of about $37,000 after inflation, calling it their worst financial mistake ever

The offloaded it in 2009 for $347,000 – a loss of about $37,000 after inflation, calling it their worst financial mistake ever

Australian house price rises during the past year

SYDNEY: Up 26 per cent to $1,410,128

MELBOURNE: Up 15 per cent to $998,356

BRISBANE: Up 32.8 per cent to $828,175

ADELAIDE: Up 28.3 per cent to $648,418

PERTH: Up 8.7 per cent to $559,837

HOBART: Up 25.1 per cent to $781,069

DARWIN: Up 8.3 per cent to $569,928

CANBERRA: Up 25.4 per cent to $1,031,410

Source: CoreLogic increases in year to February 2022 for median house prices

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Ms Morrison also bought a holiday home in Blackheath, in the Blue Mountains, for 2003 for $325,000, and offloaded it in 2009 for $347,000 – a loss of about $37,000 after inflation.

‘It was the worst financial decision we have made in our life, we couldn’t afford it so we sold it,’ Mr Morrison admitted. 

The sale of both properties allowed the couple to buy their best-known property in July 2009 – a three-bedroom, two-bathroom house in Port Hacking for $920,000, the year their eldest daughter turned two.

Their original Lugar Brae Avenue home sold again in 2014, this time for $1.4 million, and given the rise in Sydney property prices in the past few years alone, it would likely be worth well over $2 million today.

This means to buy the same two-bedroom duplex Mr Morrison’s family snapped up, young Australians would have to shell out three or even four times as much money. 

They could have a fighting chance in less-desirable suburbs if wages hadn’t also stagnated over the intervening 27 years. 

Instead, young Australians hoping to get into real estate have also battled with weak pay increases, with wages growth stuck below the long-term average of three per cent since mid-2013 as house prices have surged by double-digit margins in most of those years.  

Mr Morrison still owns his stylish Port Hacking home since moving to Kirribilli House after he became PM on August 24, 2018. 

That house features polished floors and an unusual pine ceiling over the main living area, along with a pool, covering 696sqm.

It is several blocks away from Dolans Bay, west of Cronulla Beach, and across the water from Royal National Park, a popular camping and hiking area.

Houses around Cronulla now typically sell for more than $3 million. 

The Morrisons bought their best-known home - a three-bedroom, two-bathroom house in Port Hacking for $920,000 in July 2009, the year their eldest daughter turned two

The Morrisons bought their best-known home - a three-bedroom, two-bathroom house in Port Hacking for $920,000 in July 2009, the year their eldest daughter turned two

The Morrisons bought their best-known home – a three-bedroom, two-bathroom house in Port Hacking for $920,000 in July 2009, the year their eldest daughter turned two

The house features polished floors and an unusual pine ceiling over the main living area, along with a pool, covering 696sqm

The house features polished floors and an unusual pine ceiling over the main living area, along with a pool, covering 696sqm

 The house features polished floors and an unusual pine ceiling over the main living area, along with a pool, covering 696sqm

It is several blocks away from Dolans Bay, west of Cronulla Beach, and across the water from Royal National Park, a popular camping and hiking area

It is several blocks away from Dolans Bay, west of Cronulla Beach, and across the water from Royal National Park, a popular camping and hiking area

It is several blocks away from Dolans Bay, west of Cronulla Beach, and across the water from Royal National Park, a popular camping and hiking area 

Why was Scott Morrison asked where you could buy a $750,000 home?

Mr Morrison was asked where families could buy a $750,000 house in Sydney because that is close to the threshold for his ‘home guarantee’ scheme that will be extended in Tuesday’s federal budget.

It allows first home buyers to purchase a property with either a two or five per cent deposit.

The scheme has faced criticism because it can only be used on homes under a certain price guide outlined by the government.

For example, the price cap in Sydney is $800,000, while in Melbourne it’s $700,000. This is despite Sydney having a median house price of $1,410,128, Melbourne’s being $998,356, based on CoreLogic data. 

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Mr Morrison was asked where families could buy a $750,000 house in Sydney because that is close to the threshold for his ‘home guarantee’ scheme that will be extended in Tuesday’s federal budget.

The government’s plan allows first home buyers to purchase a property with either a two or five per cent deposit. 

The scheme has faced criticism because it can only be used on homes under a certain price guide outlined by the government and a person is eligible if they earn no more than $125,000 a year and $200,000 for couples. 

For example, the price cap in Sydney is $800,000, while in Melbourne it’s $700,000. 

This is despite Sydney having a median house price of $1,410,128 and Melbourne having an equivalent value of $998,356, based on CoreLogic data for February. 

Sydney’s median house prices during the past year surged by 26 per cent, more than 10 times Australia’s 2.3 per cent wage price index. 

Across Australia, property prices last year surged by more than 22 per cent – the fastest annual pace since 1989.

Average wages in Sydney rose from $29,500 when Mr Morrison bought his first home in 1995 to $90,917 in 2022.

Mr Morrison moved into Kirribilli House after he became PM on August 24, 2018, when he became prime minister

Mr Morrison moved into Kirribilli House after he became PM on August 24, 2018, when he became prime minister

Mr Morrison moved into Kirribilli House after he became PM on August 24, 2018, when he became prime minister

Prime Minister Scott Morrison with his wife Jenny Morrison and daughters Abbey (right) and Lily (left) at Government House in Canberra. His mother Marion Morrison is pictured far right

Prime Minister Scott Morrison with his wife Jenny Morrison and daughters Abbey (right) and Lily (left) at Government House in Canberra. His mother Marion Morrison is pictured far right

Prime Minister Scott Morrison with his wife Jenny Morrison and daughters Abbey (right) and Lily (left) at Government House in Canberra. His mother Marion Morrison is pictured far right

However, average house prices rose from $196,700 to $1.4 million in the same period.

Borrowers buying such a house would be in mortgage stress unless they earned more than $188,000 a year either individually or with their spouse.

Just 3.4 per cent of workers in Australia earn more than $180,000 a year, tax office data shows.

Debt to income ratios between then and also show how much less affordable houses now are, blowing out from six times the average annual full time income for a house from 1995 to 15 times in 2022.

During the press conference, one journalist put Mr Morrison on the spot by asking: ‘Should it have been adjusted with the rising cost of housing? It’s been three years, the housing price has gone up – how are people going to get into a home in Sydney?’

However, Mr Morrison’s answer did not address the question at hand.

‘Let me point out the program again. Twenty per cent down to five per cent. If the prices are rising, it is five per cent or 20 per cent of the increased price. So the ability to cut that down by 15 per cent makes all the difference,’ he said.

Mr Morrison's infamous rendition of April Sun in Cuba by New Zealand band Dragon was filmed in Kirribilli House

Mr Morrison's infamous rendition of April Sun in Cuba by New Zealand band Dragon was filmed in Kirribilli House

Mr Morrison’s infamous rendition of April Sun in Cuba by New Zealand band Dragon was filmed in Kirribilli House

How Scott Morrison’s First Home Guarantee works

Scott Morrison’s First Home Guarantee allows people to put down a 5 per cent deposit without having to pay lenders mortgage insurance because the government guarantees the loan, with 35,000 places made available each year.

Meanwhile, five thousand places per year will be offered under the Family Home Guarantee, which allows single parents to put down a deposit of 2 per cent.

There will also be a new scheme established called the Regional Home Guarantee (RHG) that aims to encourage more construction outside of capital cities.

It will be available to first home buyers, people who have not owned a property in the past five years and permanent residents, which the government hopes will encourage migrants to settle in regional areas.

To access the regional scheme, applicants must either build or purchase a newly built home and there will be 10,000 places per year available from October 1.  

Eligible first home buyers can apply for the scheme through a participating lender. 

The full list of participating lenders is at: www.nhfic.gov.au/whatwe-do/fhlds/how-to-apply  

 What property price thresholds apply for the first home guarantee scheme?
State/Territory  Price cap in capital city (and major regional centres in NSW, VIC and QLD)   Price cap in the rest of the state/territory   
NSW $800,000 $600,000  
VIC  $700,000  $500,000   
QLD  $650,000  $400,000   
WA  $500,000  $400,000  
SA  $500,000  $350,000   
TAS  $500,000  $400,000   
ACT  $500,000  NA   
NT  $500,000  NA   
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Source: DailyMail

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